Alex McLeish has been told that his job as Birmingham City's manager is safe but that he will need to lead the club back into the Premier League at the first attempt to hold on to his position. Peter Pannu, Birmingham's acting chairman, made the board's stance clear in a statement designed to put an end to speculation about McLeish's future in the wake of relegation and also set out their expectations for the next 12 months.

McLeish is determined to fight his corner to ensure that he is given every chance of succeeding by holding on to the club's key players. Craig Gardner, Birmingham's leading scorer last season with 10 goals, Ben Foster, who was named the club's player of the year, and Scott Dann, whose absence through injury over the final four months of the campaign was particularly damaging, will be top of the list that the manager wishes to retain as he seeks to keep together the backbone of his first-choice starting XI.

How easy that will be in the face of inevitable interest from Premier League clubs and with Birmingham facing a significant financial shortfall that needs to be covered remains to be seen. The wage bill will be eased by contract clauses that stipulate salaries are reduced in the event of relegation – it is understood that the percentage varies from player to player – and also the anticipated departure of at least 10 members of the first-team squad who met at the training ground on Monday morning.

Alexander Hleb, Obafemi Martins, Matt Derbyshire and David Bentley will return to their parent clubs after their loan deals expired. Lee Bowyer is expected to join the newly promoted Queens Park Rangers on a free transfer and Sebastian Larsson, who is also out of contract, is set to secure an immediate return to the Premier League, possibly with Sunderland. Stuart Parnaby, Kevin Phillips, Enric Vallès and Marcus Bent, who have been peripheral figures over the past 12 months, will also move on.

There appears to be little scope for Birmingham to raise significant funds through player sales should the need arise. Gardner, Foster, Dann and, to a lesser extent, Nikola Zigic would command sizeable fees, although beyond that it is difficult to imagine Birmingham bringing in substantial sums for anyone else. Roger Johnson, who has struggled for form in the latter part of the season, could be allowed to depart, although Birmingham's asking price will be restricted because the central defender has only 12 months remaining on his contract.

James McFadden, Stephen Carr and Martin Jiranek are all in discussions with Birmingham over taking up contracts with an option to be extended. McFadden, who has just recovered from a cruciate ligament injury, and Carr, the club's captain, seem almost certain to stay on and would add valuable experience in the Championship.

It would certainly be a major surprise if McLeish was given much to spend in the summer. Pannu claimed on Monday that Carson Yeung, the club's president and largest single shareholder, had already provided significant backing to the manager. "The board will take stock of what went wrong this season despite Carson Yeung's promised injection of £40m in funds – not £80m as the media wrongly assumed – and will closely discuss and implement appropriate procedures to ensure a speedy return to the top flight," said Pannu.

Salaries, agent fees, transfer fees and loan payments have all been included to get the total of £40m, which was what Yeung promised he would spend in each of the last two seasons when he took over in October 2009. "The £40m in the January transfer window is my commitment to the Birmingham fans," said Yeung back then. "We have made that decision to spend the money to buy the players. The money is in place and available. The priority for now is staying in the Premier League. Next season we put more than £40m into the team, making it much stronger."

Yeung had envisaged establishing Birmingham as a Premier League club at that point but the 2-1 defeat at White Hart Lane has derailed long-term plans and left McLeish with a straightforward task to ensure that he avoids the sack. "The board regrets [Sunday's] result and subsequent relegation and feels that supporters, who have continued to back us magnificently, have been let down," said Pannu in his statement. "The club can confirm that manager Alex McLeish's job is safe but that the board will expect him to lead the side back to the Premier League in the 2011-12 season."